2020 has been a challenging year for the retail & food industry and the 2021 season is still uncertain. Many frozen dessert businesses struggled with quarantine closures and restrictions while some continued to manage their bottom-line through creative and aggressive Take-Out marketing campaigns. The following is an analysis based on IBISWorld Industry Reports on Ice Cream Production in the U.S. and Ice Cream & Gelato Store Franchises.
Take a moment to analyze your 2020 business & season in light of these industry trends and start planning NOW for next season. Don’t lose the opportunity to put yourself into a more advantageous position for 2021.
According to IBIS, There are a lot of things
that affect your business.
1- These are the factors you have no control over:
Industry Price of Milk & Sugar - there is a constant fluctuation in the market costs for these ingredients used in pre-made Ice Cream Mix or creating your own product. Be sure your operating budget allows flexibility to accommodate these changes.
Your customers Disposable income - as the economy goes, so goes the amount of expendable income on "unnecessary" products. Sometimes frozen desserts are considered a relatively inexpensive treat, and demand actually increases during more difficult financial times. Be aware of your Menu pricing, and make sure you are realistically covering your operating costs.
Worldwide Vanilla supplies & shortages - Crop failures and lesser yields due to unforeseen weather conditions have created extreme shortages in this resource. When supply is low & demand is high...the price of this resource climbs upward. There is no real good substitute for pure Vanilla Extract or whole Vanilla Beans, so be prepared for the increased cost in Vanilla flavored Ice Cream Mix. Understand too that a lesser quality product can be manufactured using an artificial substitute, but flavor & after-taste will be affected.
Market Competition - you should always be aware of the products & trends featured by over-the-counter retailers, big name chains, or an existing or new geographically close business offering similar products. The larger they are, the more money they spend on research and development for new products. Without a similar investment, you can take advantage of their market expertise but create a marketing campaign that will differentiate your business from the competition.
The Healthy Eating Index (Growing health consciousness) - key trends lean towards maintaining weight, increasing exercise, "green alternatives", vegan, non-GMO...etc.
This trend is not only in the frozen dessert industry, but throughout all other areas in the food industry.
Covid-19 regulations - to close or not to close your business, to open only with outdoor dining, to open at 10% - 25% capacity, or take-out only. State governments dictate if, when & how you are permitted to do business. Failure to follow dictates could result in loss of license. All told, this leaves you in a precarious position of going out of business, losing your employees, or surviving enough to pay your rent, utility bills and inventory costs.
2- These are Key Rising Trends in the Industry:
- Gelato is expected to outgrow the mainstream ice cream segment over the next 5 years.
- Healthier options such as : Low fat, Gluten free, non-dairy, “clean” or vegan alternatives are in high demand.
- Premium flavors. Research shows that customers are paying more for a perceived better & more indulgent product.
- Single-serve novelties are rising in popularity.
- The Pandemic will change the way the industry operates.
Here are a few ideas to help your business grow
based on Industry trends:
Add Gelato. This market is trending higher & expected to outgrow ice cream sales through 2025. Start riding the demand curve up into a new product segment. Expand your existing menu to include and prominently feature a few "hot" Gelato flavors.
Add healthier offerings to your menu: Low fat, Gluten free, non-dairy, “clean” or vegan alternatives to take advantage of the market trend. Luckily, the easiest way to do so is by adding Gelato which already features many of these categories. So now, by adding Gelato to your menu, you have satisfied the demand for this frozen dessert product in the marketplace as well as the demand for a more healthful product.
Create & ADVERTISE Take-Out Ice Cream Social Family Packs. Especially in light of Covid-19 regulations! If you don't advertise, you don't exist. Customers will assume you are closed, or not offering a safe alternative to getting their frozen dessert treats.
If you can put in a drive-thru lane or a drive-up service for your business...DO IT! Especially now! Research has shown that a drive-thru results in a higher turnover of customers, higher items per transaction, with the ability to service the customer in all sorts of weather, in a safe, hygienic and efficient manner.
Create pre-packaged single-serve Novelties such as ice cream sandwiches or sundaes for quick Take-Out or for health-conscious parents wishing to limit their portions while treating their children. Be sure to charge a higher price to account for packaging & convenience for customer. Advertise these items heavily in your drive-thru lane. No prep, quick & clean grab and go, and a faster turnover of customers resulting in more sales.
Develop Premium products. Customers are willing to pay higher prices for premium offerings. Perceived higher cost is often an indicator of Perceived higher quality. Just make sure you live up to the perception! Tasteless products using cheap ingredients is a sure way to lose returning customers after their first bite. A customer who experiences a rich, delicious treat worthy of the price, will not only return for more, but tell others about their experience.
Develop specialty or indulgent flavors with short production runs and limited time frames. Don't be the store known for just chocolate and vanilla with minor variations. Create delicious, unique and indulgent treats sure to keep your customers intrigued and returning to check out the latest item. Become the shop people will seek out on their next trip.
ADVERTISE your unique product offerings to gain market share and differentiate yourself from the competition. Again...if you don't advertise, you don't exist! No one will know of your amazing menu or your incredible flavors unless you TELL THEM. Take advantage of reaching your customers through Social Media. One post can multiply exponentially through Facebook, Twitter, Pinterest,...etc. Be sure to invest in a good website so you can be found online. Use bright & colorful signage on your building, create posters, take out ads in your local newspaper, support a local team, re-do your menu boards so they are colorful & legible, feature regular promotions of new flavors...and the list goes on!
Develop and maintain a strong relationship with your supplier. A supplier will give a loyal customer precedence over a once-in-a-while customer, especially during changing market conditions. If you are used to getting cups here, Ice Cream Mix, there, toppings and bases somewhere else, you don't have any loyalty to any one supplier, so why should they be loyal to you when products become difficult to find. Every supplier will take care of their best customers first during times of market turmoil, while putting the rest, who they only see once in a while, on the waiting list. Don't risk your business...maintain continuity of inventory.
Congratulations on your commitment to improving your business!
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Gil’s Ice Cream Supplies
320 W Oak Lane Glenolden PA 19036
Gil’s carries a huge selection of Ice Cream, Italian Ice and Gelato Supplies, paper & plastic products, candy, snacks and concession items such as Candy & Caramel Apple Dip, popcorn, cotton candy and snow cone flavors and supplies. With over 8,000 items, we pride ourselves on over 40 years of excellent service and product expertise. We deliver all over the world with our fleet of trucks and by common carrier.
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